Providers in the travel insurance market have adapted their policy wording in light of the crisis, in a move that will allow the market to recover from the effects of the pandemic, according to GlobalData.
The data and analytics group said that this shift in the market, which has also caused many providers to pause the sale of new policies, has given customers a confidence boost in travelling, which will in turn aid the sector’s recovery.
It comes as Saga is now the latest provider to include Covid-19 cover in its policies.
According to GlobalData, the announcement that Saga will now protect policyholders against trip cancelation claims, should they have a positive Covid-19 test result within 14 days of travel or whilst abroad, will “help set the bar for the rest of the market”.
Daniel Pearce, senior insurance analyst at GlobalData, said: “Prospective travelers will welcome the change to policies as the fear of being unable to go on a trip due to quarantine rules will have been limiting the number of trips booked and stifling growth in the travel insurance market.
“However, despite the policy going further than others currently available, it will still not be enough to spur growth in the travel insurance market.”
He added: “Globally, the spread of COVID-19 appears to be on the resurgence, with local lockdown measures being implemented and changing quarantine rules becoming increasingly common.”
“Despite this, policy wording must continue to be adapted to provide some element of cover against COVID-19 in order to allow the travel insurance market to recover from its greatest ever shock.”
GlobalData further warned that if interest in international travel remains “well below” pre-Covid-19 levels for some years to come, the travel insurance market may have to look towards marketing policies for staycations.
It comes as the popularity of staycations has increased “drastically” this year.
Pearce added: “Although such policies need not cover the same perils as they do for international travel, this segment could be a hotbed for future growth.”